Penns Woods Bancorp, Inc. Reports Third Quarter 2022 Earnings

Rhea-AI Summary

Penns Woods Bancorp reported a net income of $12.9 million for the nine months ending September 30, 2022, with EPS of $1.83.

For Q3, net income was $5.3 million, up from $4.1 million in 2021. However, the results were impacted by increased after-tax securities losses of $199,000 and additional compensation expenses of $183,000.

Loan provisions increased significantly, reflecting portfolio growth, while core earnings showed a positive trend, reaching $5.4 million for Q3 2022.

Positive

• Net income for nine months increased to $12.9 million from $11.2 million in 2021.
• EPS rose to $1.83 compared to $1.58 in the previous year.
• Core earnings for nine months increased to $13.2 million from $10.9 million in 2021.
• Non-performing loans ratio improved to 0.37% from 0.58% year-over-year.

Negative

• Increased after-tax securities losses of $494,000 for the nine-month period.
• Additional compensation expense of $145,000 related to stock options settlement.
• Total assets decreased by $5.7 million year-over-year.

WILLIAMSPORT, Pa., Oct. 21, 2022 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. achieved net income of $12.9 million for the nine months ended September 30, 2022, resulting in basic and diluted earnings per share of $1.83.

Highlights

• Net income, as reported under GAAP, for the three and nine months ended September 30, 2022 was $5.3 million and $12.9 million, respectively, compared to $4.1 million and $11.2 million for the same periods of 2021. Results for the three and nine months ended September 30, 2022 compared to 2021 were impacted by an increase in after-tax securities losses of $199,000 (from a gain of $32,000 to a loss of $167,000) for the three month period and an increase in after-tax securities losses of $494,000 (from a gain of $236,000 to a loss of $258,000) for the nine month period. Results for the nine months ended September 30, 2022 were impacted by additional compensation expense of $183,000 (after-tax $145,000) associated with the voluntary cash settlement of 346,725 outstanding stock options. In addition, an after-tax loss of $201,000 related to a branch closure negatively impacted results for the nine months ended September 30, 2022.
  
  
• The provision for loan losses increased $780,000 for the three months and $395,000 for the nine months ended September 30, 2022 to $855,000 and $1.3 million, respectively, compared to $75,000 and $940,000 for the 2021 periods. The increases in the provision for loan losses were primarily due to the significant growth in the loan portfolio.
  
  
• Basic and diluted earnings per share for the three and nine months ended September 30, 2022 were $0.74 and $1.83. Basic and diluted earnings per share for the three and nine months ended September 30, 2021 were $0.58 and $1.58.
  
  
• Annualized return on average assets was 1.09% for three months ended September 30, 2022, compared to 0.86% for the corresponding period of 2021. Annualized return on average assets was 0.89% for the nine months ended September 30, 2022, compared to 0.79% for the corresponding period of 2021.
  
  
• Annualized return on average equity was 12.61% for the three months ended September 30, 2022, compared to 9.85% for the corresponding period of 2021. Annualized return on average equity was 10.48% for the nine months ended September 30, 2022, compared to 9.17% for the corresponding period of 2021.
  

Net Income

Net income from core operations (“core earnings”), which is a non-generally accepted accounting principles (GAAP) measure of net income excluding net securities gains or losses, was $5.4 million for the three months ended September 30, 2022 compared to $4.1 million for the same period of 2021. Core earnings were $13.2 million for the nine months ended September 30, 2022, compared to $10.9 million for the same period of 2021. Core earnings per share for the three months ended September 30, 2022 were $0.77 basic and diluted, compared to $0.58 basic and diluted core earnings per share for the same period of 2021. Core earnings per share for the nine months ended September 30, 2022 were $1.87 basic and diluted, compared to $1.55 basic and diluted for the same period of 2021. Core return on average assets and core return on average equity were 1.12% and 13.02% for the three months ended September 30, 2022, compared to 0.86% and 9.78% for the corresponding period of 2021. Core return on average assets and core return on average equity were 0.91% and 10.69% for the nine months ended September 30, 2022 compared to 0.77% and 8.98% for the corresponding period of 2021. Core earnings for the nine months ended September 30, 2022 were impacted negatively by an after-tax compensation expense of $145,000 relating to the voluntary cash settlement of 346,725 stock options along with an after-tax loss of $201,000 relating to a branch closure. A reconciliation of the non-GAAP financial measures of core earnings, core return on assets, core return on equity, and core earnings per share described in this press release to the comparable GAAP financial measures is included at the end of this press release.

Net Interest Margin

The net interest margin for the three and nine months ended September 30, 2022 was 3.47% and 3.17%, compared to 2.85% and 2.84% for the corresponding periods of 2021. The increase in the net interest margin for the three and nine month periods was driven by a decline in the rate paid on interest-bearing deposits of 23 and 29 basis points ("bps") as rates paid decreased throughout 2021 and remained at historically low levels during 2022. Leading the decline in the rate paid on interest-bearing deposits were decreases of 84 and 91 bps in the rate paid on time deposits as time deposits issued prior to the COVID-19 pandemic matured. The increase in the earning asset yield was driven by an increase in yield on federal funds sold and interest-bearing deposits due to the rate increases enacted by the Federal Open Market Committee ("FOMC"). For the three and nine months ended September 30, 2022 in comparison to the same periods of 2021, there was an increase in rate on federal funds sold of 186 and 70 bps, respectively, while the rate on interest bearing deposits increased 218 and 48 bps. The three month period ended September 30, 2022 was impacted by an increase of 18 bps in the yield earned on the securities portfolio as legacy securities matured with the funds reinvested at higher rates.

Assets

Total assets decreased $5.7 million to $1.9 billion at September 30, 2022 compared to September 30, 2021.  Cash and cash equivalents decreased $244.8 million as interest-bearing accounts in other financial institutions decreased $193.7 million and fed funds sold decreased $40.0 million as excess liquidity was primarily utilized to fund the growth in the loan portfolio. Net loans increased $212.8 million to $1.5 billion at September 30, 2022 compared to September 30, 2021, as an emphasis was placed on commercial loan growth and customers focused on obtaining funding prior to additional FOMC rate increases. The investment portfolio increased $21.2 million from September 30, 2021 to September 30, 2022 as a portion of the excess cash liquidity was invested primarily into short and medium-term municipal bonds with a maturity of 10 years or less.

Non-performing Loans

The ratio of non-performing loans to total loans ratio decreased to 0.37% at September 30, 2022 from 0.58% at September 30, 2021 as non-performing loans have decreased to $5.7 million at September 30, 2022 from $7.8 million at September 30, 2021. The majority of non-performing loans involve loans that are either in a secured position and have sureties with a strong underlying financial position or have a specific allocation for any impairment recorded within the allowance for loan losses. Net loan charge-offs of $300,000 for the nine months ended September 30, 2022 impacted the allowance for loan losses, which was 0.97% of total loans at September 30, 2022 compared to 1.08% at September 30, 2021.

Deposits

Deposits decreased $2.6 million to $1.6 billion at September 30, 2022 compared to September 30, 2021. Noninterest-bearing deposits increased $55.5 million to $537.4 million at September 30, 2022 compared to September 30, 2021.  Driving core deposit growth was the continued emphasis on increasing the utilization of electronic (internet and mobile) deposit banking among our customers. Utilization of internet and mobile banking has increased since the start of 2020 due to these efforts coupled with a change in consumer behavior due to the business and travel restrictions caused by the COVID-19 pandemic. Interest-bearing deposits decreased $58.1 million due to the maturity of higher cost time deposits.

Shareholders’ Equity

Shareholders’ equity decreased $4.0 million to $164.5 million at September 30, 2022 compared to September 30, 2021.  Accumulated other comprehensive loss of $14.6 million at September 30, 2022 increased from a loss of $2.0 million at September 30, 2021 as a result of a $11.1 million net unrealized loss on available for sale securities at September 30, 2022 compared to an unrealized gain of $3.5 million at September 30, 2021 coupled with a decrease in loss of $2.0 million in the defined benefit plan obligation. The current level of shareholders’ equity equates to a book value per share of $23.32 at September 30, 2022 compared to $23.84 at September 30, 2021, and an equity to asset ratio of 8.63% at September 30, 2022 and 8.82% at September 30, 2021. Dividends declared for the nine months ended September 30, 2022 and 2021 were $0.96 per share.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates seventeen branch offices providing financial services in Lycoming, Clinton, Centre, Montour, Union, and Blair Counties, and Luzerne Bank, which operates eight branch offices providing financial services in Luzerne County, and United Insurance Solutions, LLC, which offers insurance products.  Investment and insurance products are offered through Jersey Shore State Bank’s subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group.

NOTE:  This press release contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).  Management uses the non-GAAP measure of net income from core operations in its analysis of the company’s performance. This measure, as used by the Company, adjusts net income determined in accordance with GAAP to exclude the effects of special items, including significant gains or losses that are unusual in nature such as net securities gains and losses. Because these certain items and their impact on the Company’s performance are difficult to predict, management believes presentation of financial measures excluding the impact of such items provides useful supplemental information in evaluating the operating results of the Company’s core businesses. These disclosures should not be viewed as a substitute for net income determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

This press release may contain certain “forward-looking statements” including statements concerning plans, objectives, future events or performance and assumptions and other statements, which are statements other than statements of historical fact.  The Company cautions readers that the following important factors, among others, may have affected and could in the future affect actual results and could cause actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company herein: (i) the effect of changes in laws and regulations, including federal and state banking laws and regulations, and the associated costs of compliance with such laws and regulations either currently or in the future as applicable; (ii) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as by the Financial Accounting Standards Board, or of changes in the Company’s organization, compensation and benefit plans; (iii) the effect on the Company’s competitive position within its market area of the increasing consolidation within the banking and financial services industries, including the increased competition from larger regional and out-of-state banking organizations as well as non-bank providers of various financial services; (iv) the effect of changes in interest rates; (v) the effects of health emergencies, including the spread of infectious diseases or pandemics; or (vi) the effect of changes in the business cycle and downturns in the local, regional or national economies.  For a list of other factors which could affect the Company’s results, see the Company’s filings with the Securities and Exchange Commission, including “Item 1A.  Risk Factors,” set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

You should not place undue reliance on any forward-looking statements.  These statements speak only as of the date of this press release, even if subsequently made available by the Company on its website or otherwise.  The Company undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.

Previous press releases and additional information can be obtained from the Company’s website at www.pwod.com.

Contact:	Richard A. Grafmyre, Chief Executive Officer
	110 Reynolds Street
	Williamsport, PA 17702
	570-322-1111	e-mail: pwod@pwod.com

PENNS WOODS BANCORP, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED)
		September 30,
(In Thousands, Except Share and Per Share Data)			2022				2021			% Change
ASSETS:
Noninterest-bearing balances		$	24,418			$	35,523			(31.26	)%
Interest-bearing balances in other financial institutions			12,444				206,124			(93.96	)%
Federal funds sold			—				40,000			(100.00	)%
Total cash and cash equivalents			36,862				281,647			(86.91	)%
Investment debt securities, available for sale, at fair value			188,196				166,760			12.85	%
Investment equity securities, at fair value			1,130				1,303			(13.28	)%
Restricted investment in bank stock, at fair value			14,539				14,649			(0.75	)%
Loans held for sale			2,485				3,246			(23.44	)%
Loans			1,560,700				1,347,225			15.85	%
Allowance for loan losses			(15,211	)			(14,557	)		4.49	%
Loans, net			1,545,489				1,332,668			15.97	%
Premises and equipment, net			32,227				34,434			(6.41	)%
Accrued interest receivable			8,647				8,529			1.38	%
Bank-owned life insurance			34,288				33,836			1.34	%
Investment in limited partnerships			4,771				5,014			(4.85	)%
Goodwill			17,104				17,104			—	%
Intangibles			361				524			(31.11	)%
Operating lease right of use asset			2,699				2,899			(6.90	)%
Deferred tax asset			7,187				4,049			77.50	%
Other assets			9,131				4,129			121.14	%
TOTAL ASSETS		$	1,905,116			$	1,910,791			(0.30	)%
LIABILITIES:
Interest-bearing deposits		$	1,053,012			$	1,111,144			(5.23	)%
Noninterest-bearing deposits			537,403				481,875			11.52	%
Total deposits			1,590,415				1,593,019			(0.16	)%
Short-term borrowings			30,901				9,404			228.59	%
Long-term borrowings			102,829				126,007			(18.39	)%
Accrued interest payable			427				828			(48.43	)%
Operating lease liability			2,753				2,947			(6.58	)%
Other liabilities			13,302				10,105			31.64	%
TOTAL LIABILITIES			1,740,627				1,742,310			(0.10	)%
SHAREHOLDERS’ EQUITY:
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued			—				—			n/a
Common stock, par value $5.55, 22,500,000 shares authorized; 7,563,200 and 7,545,922 shares issued; 7,052,975 and 7,065,697 shares outstanding			42,019				41,921			0.23	%
Additional paid-in capital			53,958				53,508			0.84	%
Retained earnings			95,896				87,146			10.04	%
Accumulated other comprehensive (loss) gain:
Net unrealized (loss) gain on available for sale securities			(11,125	)			3,504			(417.49	)%
Defined benefit plan			(3,444	)			(5,486	)		37.22	%
Treasury stock at cost, 510,225 and 480,225			(12,815	)			(12,115	)		5.78	%
TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY			164,489				168,478			(2.37	)%
Non-controlling interest			—				3			(100.00	)%
TOTAL SHAREHOLDERS' EQUITY			164,489				168,481			(2.37	)%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,905,116			$	1,910,791			(0.30	)%

   

PENNS WOODS BANCORP, INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
		Three Months Ended September 30,											Nine Months Ended September 30,
(In Thousands, Except Share and Per Share Data)			2022				2021			% Change				2022				2021			% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees		$	15,051			$	13,382			12.47	%		$	41,709			$	39,826			4.73	%
Investment securities:
Taxable			949				834			13.79	%			2,550				2,491			2.37	%
Tax-exempt			236				160			47.50	%			594				495			20.00	%
Dividend and other interest income			628				338			85.80	%			1,470				903			62.79	%
TOTAL INTEREST AND DIVIDEND INCOME			16,864				14,714			14.61	%			46,323				43,715			5.97	%
INTEREST EXPENSE:
Deposits			693				1,308			(47.02	)%			2,191				4,481			(51.10	)%
Short-term borrowings			26				3			766.67	%			29				7			314.29	%
Long-term borrowings			613				771			(20.49	)%			1,871				2,430			(23.00	)%
TOTAL INTEREST EXPENSE			1,332				2,082			(36.02	)%			4,091				6,918			(40.86	)%
NET INTEREST INCOME			15,532				12,632			22.96	%			42,232				36,797			14.77	%
PROVISION FOR LOAN LOSSES			855				75			1,040.00	%			1,335				940			42.02	%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES			14,677				12,557			16.88	%			40,897				35,857			14.06	%
NON-INTEREST INCOME:
Service charges			559				456			22.59	%			1,563				1,218			28.33	%
Debt securities (losses) gains, available for sale			(156	)			48			(425.00	)%			(168	)			323			(152.01	)%
Net equity securities losses			(55	)			(8	)		(587.50	)%			(158	)			(24	)		(558.33	)%
Bank-owned life insurance			170				279			(39.07	)%			501				614			(18.40	)%
Gain on sale of loans			294				456			(35.53	)%	.		905				2,034			(55.51	)%
Insurance commissions			109				129			(15.50	)%			386				436			(11.47	)%
Brokerage commissions			142				237			(40.08	)%			500				663			(24.59	)%
Loan broker income			438				772			(43.26	)%			1,350				1,449			(6.83	)%
Debit card income			344				388			(11.34	)%			1,080				1,166			(7.38	)%
Other			238				194			22.68	%			673				595			13.11	%
TOTAL NON-INTEREST INCOME			2,083				2,951			(29.41	)%			6,632				8,474			(21.74	)%
NON-INTEREST EXPENSE:
Salaries and employee benefits			6,016				5,837			3.07	%			18,421				17,107			7.68	%
Occupancy			730				745			(2.01	)%			2,380				2,438			(2.38	)%
Furniture and equipment			816				883			(7.59	)%			2,454				2,663			(7.85	)%
Software amortization			188				226			(16.81	)%			660				632			4.43	%
Pennsylvania shares tax			334				373			(10.46	)%			1,119				1,097			2.01	%
Professional fees			626				615			1.79	%			1,746				1,882			(7.23	)%
Federal Deposit Insurance Corporation deposit insurance			260				220			18.18	%			690				705			(2.13	)%
Marketing			151				231			(34.63	)%			435				434			0.23	%
Intangible amortization			34				44			(22.73	)%			119				147			(19.05	)%
Other			1,165				1,273			(8.48	)%			3,723				3,541			5.14	%
TOTAL NON-INTEREST EXPENSE			10,320				10,447			(1.22	)%			31,747				30,646			3.59	%
INCOME BEFORE INCOME TAX PROVISION			6,440				5,061			27.25	%			15,782				13,685			15.32	%
INCOME TAX PROVISION			1,190				932			27.68	%			2,869				2,516			14.03	%
NET INCOME		$	5,250			$	4,129			27.15	%		$	12,913			$	11,169			15.61	%
Earnings attributable to noncontrolling interest			—				4			(100.00	)%			—				15			(100.00	)%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'		$	5,250			$	4,125			27.27	%		$	12,913			$	11,154			15.77	%
EARNINGS PER SHARE - BASIC		$	0.74			$	0.58			27.59	%		$	1.83			$	1.58			15.82	%
EARNINGS PER SHARE - DILUTED		$	0.74			$	0.58			27.59	%		$	1.83			$	1.58			15.82	%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC			7,051,228				7,063,994			(0.18	)%			7,060,871				7,059,625			0.02	%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED			7,051,228				7,063,994			(0.18	)%			7,060,871				7,059,625			0.02	%

PENNS WOODS BANCORP, INC. AVERAGE BALANCES AND INTEREST RATES (UNAUDITED)
		Three Months Ended
		September 30, 2022									September 30, 2021
(Dollars in Thousands)		Average Balance(1)			Interest			Average Rate			Average Balance(1)			Interest			Average Rate
ASSETS:
Tax-exempt loans (3)		$	58,735		$	394		2.66	%		$	46,193		$	307		2.64	%
All other loans			1,463,330			14,740		4.00	%			1,296,790			13,139		4.02	%
Total loans (2)			1,522,065			15,134		3.94	%			1,342,983			13,446		3.97	%
Federal funds sold			33,641			218		2.57	%			40,000			72		0.71	%
Taxable securities			159,721			1,158		2.94	%			150,308			1,022		2.76	%
Tax-exempt securities (3)			49,177			299		2.47	%			37,069			203		2.22	%
Total securities			208,898			1,457		2.83	%			187,377			1,225		2.65	%
Interest-bearing deposits			34,202			201		2.33	%			205,715			78		0.15	%
Total interest-earning assets			1,798,806			17,010		3.76	%			1,776,075			14,821		3.32	%
Other assets			130,576									132,820
TOTAL ASSETS		$	1,929,382								$	1,908,895
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings		$	249,083			26		0.04	%		$	228,255			22		0.04	%
Super Now deposits			405,173			287		0.28	%			308,591			219		0.28	%
Money market deposits			287,660			200		0.28	%			306,177			238		0.31	%
Time deposits			148,968			180		0.48	%			248,649			829		1.32	%
Total interest-bearing deposits			1,090,884			693		0.25	%			1,091,672			1,308		0.48	%
Short-term borrowings			8,062			26		1.23	%			8,696			3		0.14	%
Long-term borrowings			109,269			613		2.23	%			133,536			771		2.29	%
Total borrowings			117,331			639		2.16	%			142,232			774		2.16	%
Total interest-bearing liabilities			1,208,215			1,332		0.44	%			1,233,904			2,082		0.67	%
Demand deposits			533,681									490,500
Other liabilities			21,008									17,027
Shareholders’ equity			166,478									167,464
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,929,382								$	1,908,895
Interest rate spread (3)								3.32	%								2.65	%
Net interest income/margin (3)					$	15,678		3.47	%					$	12,739		2.85	%

1.  Information on this table has been calculated using average daily balance sheets to obtain average balances.
2.  Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.
3.  Income and rates on fully taxable equivalent basis include an adjustment for the difference between annual income from tax-exempt obligations and the taxable equivalent of such income at the standard tax rate of 21%

		Three Months Ended September 30,
		2022			2021
Total interest income		$	16,864		$	14,714
Total interest expense			1,332			2,082
Net interest income (GAAP)			15,532			12,632
Tax equivalent adjustment			146			107
Net interest income (fully taxable equivalent) (non-GAAP)		$	15,678		$	12,739

PENNS WOODS BANCORP, INC. AVERAGE BALANCES AND INTEREST RATES  (UNAUDITED)
		Nine Months Ended
		September 30, 2022									September 30, 2021
(Dollars in Thousands)		Average Balance(1)			Interest			Average Rate			Average Balance(1)			Interest			Average Rate
ASSETS:
Tax-exempt loans (3)		$	53,269		$	1,033		2.59	%		$	46,217		$	991		2.87	%
All other loans			1,403,504			40,893		3.90	%			1,292,028			39,043		4.04	%
Total loans (2)			1,456,773			41,926		3.85	%			1,338,245			40,034		4.00	%
Federal funds sold			43,938			465		1.41	%			21,993			117		0.71	%
Taxable securities			152,937			3,126		2.76	%			147,942			3,105		2.84	%
Tax-exempt securities (3)			45,357			752		2.24	%			36,638			627		2.31	%
Total securities			198,294			3,878		2.64	%			184,580			3,732		2.73	%
Interest-bearing deposits			97,520			429		0.59	%			206,895			172		0.11	%
Total interest-earning assets			1,796,525			46,698		3.48	%			1,751,713			44,055		3.37	%
Other assets			129,048									128,567
TOTAL ASSETS		$	1,925,573								$	1,880,280
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings		$	246,063			72		0.04	%		$	222,889			94		0.06	%
Super Now deposits			388,149			721		0.25	%			294,570			694		0.31	%
Money market deposits			296,998			596		0.27	%			307,309			761		0.33	%
Time deposits			167,876			802		0.64	%			253,130			2,932		1.55	%
Total interest-bearing deposits			1,099,086			2,191		0.27	%			1,077,898			4,481		0.56	%
Short-term borrowings			6,308			29		0.59	%			7,152			7		0.13	%
Long-term borrowings			112,457			1,871		2.22	%			138,669			2,430		2.34	%
Total borrowings			118,765			1,900		2.14	%			145,821			2,437		2.23	%
Total interest-bearing liabilities			1,217,851			4,091		0.45	%			1,223,719			6,918		0.76	%
Demand deposits			519,599									473,088
Other liabilities			23,814									21,327
Shareholders’ equity			164,309									162,146
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,925,573								$	1,880,280
Interest rate spread (3)								3.03	%								2.61	%
Net interest income/margin (3)					$	42,607		3.17	%					$	37,137		2.84	%

1.  Information on this table has been calculated using average daily balance sheets to obtain average balances.
2.  Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.
3.  Income and rates on fully taxable equivalent basis include an adjustment for the difference between annual income from tax-exempt obligations and the taxable equivalent of such income at the standard tax rate of 21%

		Nine Months Ended September 30,
		2022			2021
Total interest income		$	46,323		$	43,715
Total interest expense			4,091			6,918
Net interest income			42,232			36,797
Tax equivalent adjustment			375			340
Net interest income (fully taxable equivalent) (non-GAAP)		$	42,607		$	37,137

(Dollars in Thousands, Except Per Share Data, Unaudited)		Quarter Ended
		9/30/2022				6/30/2022				3/31/2022				12/31/2021				9/30/2021
Operating Data
Net income		$	5,250			$	4,231			$	3,432			$	4,879			$	4,125
Net interest income			15,532				13,847				12,853				12,921				12,632
Provision (credit) for loan losses			855				330				150				(300	)			75
Net security (losses) gains			(211	)			(54	)			(61	)			360				40
Non-interest income, excluding net security gains			2,294				2,191				2,473				2,835				2,911
Non-interest expense			10,320				10,420				11,007				10,259				10,447
Performance Statistics
Net interest margin			3.47	%			3.12	%			2.93	%			2.90	%			2.85	%
Annualized return on average assets			1.09	%			0.88	%			0.72	%			1.02	%			0.86	%
Annualized return on average equity			12.61	%			10.15	%			8.17	%			11.59	%			9.85	%
Annualized net loan charge-offs (recoveries) to average loans			0.01	%			(0.01	)%			0.09	%			0.02	%			(0.01	)%
Net charge-offs (recoveries)			37				(40	)			303				81				(44	)
Efficiency ratio			57.70	%			64.72	%			71.53	%			64.83	%			66.93	%
Per Share Data
Basic earnings per share		$	0.74			$	0.60			$	0.49			$	0.69			$	0.58
Diluted earnings per share			0.74				0.60				0.49				0.69				0.58
Dividend declared per share			0.32				0.32				0.32				0.32				0.32
Book value			23.32				23.56				23.81				24.37				23.84
Common stock price:
High			24.29				24.35				24.67				24.65				24.42
Low			22.02				22.34				23.64				23.50				22.78
Close			22.91				23.09				24.43				23.65				23.92
Weighted average common shares:
Basic			7,051				7,059				7,073				7,068				7,064
Fully Diluted			7,051				7,059				7,073				7,068				7,064
End-of-period common shares:
Issued			7,563				7,559				7,555				7,550				7,546
Treasury			(510	)			(510	)			(480	)			(480	)			(480	)

(Dollars in Thousands, Except Per Share Data, Unaudited)		Quarter Ended
		9/30/2022				6/30/2022				3/31/2022				12/31/2021				9/30/2021
Financial Condition Data:
General
Total assets		$	1,905,116			$	1,891,806			$	1,916,809			$	1,940,809			$	1,910,791
Loans, net			1,545,489				1,474,739				1,391,943				1,377,971				1,332,668
Goodwill			17,104				17,104				17,104				17,104				17,104
Intangibles			361				396				437				480				524
Total deposits			1,590,415				1,589,579				1,612,395				1,621,315				1,593,019
Noninterest-bearing			537,403				524,288				514,130				494,360				481,875
Savings			249,532				249,057				245,661				236,312				231,189
NOW			392,140				353,102				379,838				366,399				340,441
Money Market			268,532				309,453				299,166				318,877				305,156
Time Deposits			142,808				153,679				173,600				205,367				234,358
Total interest-bearing deposits			1,053,012				1,065,291				1,098,265				1,126,955				1,111,144
Core deposits*			1,447,607				1,435,900				1,438,795				1,415,948				1,358,661
Shareholders’ equity			164,489				166,054				168,427				172,274				168,478
Asset Quality
Non-performing loans		$	5,743			$	5,100			$	5,281			$	6,250			$	7,763
Non-performing loans to total assets			0.30	%			0.27	%			0.28	%			0.32	%			0.41	%
Allowance for loan losses			15,211				14,393				14,023				14,176				14,557
Allowance for loan losses to total loans			0.97	%			0.97	%			1.00	%			1.02	%			1.08	%
Allowance for loan losses to non-performing loans			264.86	%			282.22	%			265.54	%			226.82	%			187.52	%
Non-performing loans to total loans			0.37	%			0.34	%			0.38	%			0.45	%			0.58	%
Capitalization
Shareholders’ equity to total assets			8.63	%			8.78	%			8.79	%			8.88	%			8.82	%
* Core deposits are defined as total deposits less time deposits

Reconciliation of GAAP and Non-GAAP Financial Measures (UNAUDITED)
		Three Months Ended September 30,								Nine Months Ended September 30,
(Dollars in Thousands, Except Per Share Data)			2022				2021				2022				2021
GAAP net income		$	5,250			$	4,125			$	12,913			$	11,154
Less: net securities (losses) gains, net of tax			(167	)			32				(258	)			236
Non-GAAP core earnings		$	5,417			$	4,093			$	13,171			$	10,918
		Three Months Ended September 30,								Nine Months Ended September 30,
			2022				2021				2022				2021
Return on average assets (ROA)			1.09	%			0.86	%			0.89	%			0.79	%
Less: net securities (losses) gains, net of tax			(0.03	)%			—	%			(0.02	)%			0.02	%
Non-GAAP core ROA			1.12	%			0.86	%			0.91	%			0.77	%
		Three Months Ended September 30,								Nine Months Ended September 30,
			2022				2021				2022				2021
Return on average equity (ROE)			12.61	%			9.85	%			10.48	%			9.17	%
Less: net securities (losses) gains, net of tax			(0.41	)%			0.07	%			(0.21	)%			0.19	%
Non-GAAP core ROE			13.02	%			9.78	%			10.69	%			8.98	%
		Three Months Ended September 30,								Nine Months Ended September 30,
			2022				2021				2022				2021
Basic earnings per share (EPS)		$	0.74			$	0.58			$	1.83			$	1.58
Less: net securities (losses) gains, net of tax			(0.03	)			—				(0.04	)			0.03
Non-GAAP basic core EPS		$	0.77			$	0.58			$	1.87			$	1.55
		Three Months Ended September 30,								Nine Months Ended September 30,
			2022				2021				2022				2021
Diluted EPS		$	0.74			$	0.58			$	1.83			$	1.58
Less: net securities (losses) gains, net of tax			(0.03	)			—				(0.04	)			0.03
Non-GAAP diluted core EPS		$	0.77			$	0.58			$	1.87			$	1.55

FAQ

What is Penns Woods Bancorp's net income for the first nine months of 2022?

Penns Woods Bancorp reported a net income of $12.9 million for the nine months ending September 30, 2022.

How did Penns Woods Bancorp's earnings per share change in 2022?

The earnings per share increased to $1.83 for the nine months ended September 30, 2022, up from $1.58 in 2021.

What were the key factors affecting Penns Woods Bancorp's financial results in 2022?

The financial results were affected by increased after-tax securities losses and compensation expenses associated with stock options.

How has the loan portfolio of Penns Woods Bancorp changed?

Net loans increased by $212.8 million to $1.5 billion as of September 30, 2022.